Blog Posts From The Brave Programmer

Telkom to institute a internet bandwidth tax.

Apr1

Written by:2009/04/01 11:01 AM

Telkom and the state have done it again. With the looming possibility of lost revenue due to competitive fixed line operators, Telkom has seen that their fixed revenue stream will soon be diminished. They have started the ball rolling on authorizing an internet bandwidth tax.

At the moment the entire telecoms infrastructure is dominated and owned by the telecom giant, Telkom. All fixed line infrastructure, all internet access, all telephonic access is at some point governed or owned by Telkom. But with recent changes in law, and the injection of competitive fixed line operators, Telkom's gravy train is about to slow down or even come to a halt.

So how do they guarantee income from users who move away from the telecom giant. Simple, institute a internet bandwidth tax. Telkom have justified the tax by suggesting that the extra revenue gained will be ploughed directly into infrastructure. They say that at the end of the day, it is consumer satisfaction that they are concerned about the most.

The extra revenue will be used to bring telecoms and internet to the previously disadvantage areas. As well as improve and upgrade current infrastructure. Like laying down fibre optics to be able to supply better quality internet and faster bandwidth at a cheaper rate.

“By using the internet tax to boost infrastructure we will be able to give a better telecoms and internet service to the people of South Africa”, a spokesperson said.

How will this work? Well an amount will be added to your internet bill depending on the amount of bandwidth you use, the speed of your bandwidth, and whether the majority of your bandwidth is local or international. So people using a 56k modem will pay less internet tax than those using a 4Mb ADSL line. Those who browse and download from international sites will end up paying more tax than those whose browsing habits are mostly local. This they say will have the extra benefit of encouraging people to support locally based websites. Also those using more bandwidth per month will by nature of the percentage factor end up paying more tax.

This tax will be over and above your normal ISP monthly subscription fees. The way it will work, is that all ISPs will be obliged to submit their bandwidth usage to Telkom, who will charge them a certain fee based on the bandwidth used, that in turn will be filtered down to each ISPs customer.

According to sources, this fee will not be a huge amount, but collectively it will bolster Telkom's revenue and then in turn allow for the infrastructure upgrade. They are looking at a small percentage, probably in the region of 1% per gig used. That means that if you use 1gig per month, you will be paying 65c on internet tax per month. That's not a lot of money.